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Federal Register / Vol. 86, No. 160 / Monday, August 23, 2021 / Rules and Regulations
Reimbursement Program, which is very close to the number the Commission publicly identified in the 2019
information collection, as well as presented to Congress, as the cost to replace Huawei and ZTE equipment.
The CAA also amends the eligibility cutoff date for covered equipment and services for reimbursement to align with the date that the Designation Orders were released, June 30, 2020. Both actions indicate Congresss intent to limit the eligibility of the current Reimbursement Program to the scope of such Huawei and ZTE equipment and services on the Covered List. Yet despite the signals that Congress intended this current appropriation to fund the removal, replacement, and disposal of such Huawei and ZTE equipment and services on the Covered List through the Reimbursement Program, Congress did not restrict funding to only those equipment and services, nor did it limit any future eligibility to specific appropriations. Therefore, as discussed herein, the Commission will continue to administer the Reimbursement Program in accordance with the prioritization scheme set forth in the CAA and adopted in this Third Report and Order.
24. To maintain consistency within the Reimbursement Program, the Commission also extends the revised scope of equipment and services eligible for reimbursement throughout its rules related to the administration of the Reimbursement Program. Specifically, the Commission extends this revised scope to all references to covered communications equipment or service contained in section 4 of the Secure Networks Act, and the Commissions rules implementing that section. As noted herein, while the CAA amends the scope of equipment and services eligible for reimbursement from those solely on the Covered List to those also either defined in the 2019 Supply Chain Order or subject to the Huawei and ZTE
Designation Orders and any future designated entities identified under its designation process established in the 2019 Supply Chain Order, it does not revise the definition of covered communications equipment or service found in section 9 of the Secure Networks Act, which defines covered communications equipment and services as equipment and services found on the Covered List. As such, other references to covered communications equipment or service in section 4 of the Secure Networks Act do not reflect the revised scope of eligible equipment and services as amended by the CAA. This incongruity could lead to discrepancies between the
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equipment and services participants are required to remove and dispose of and the equipment and services for which they are permitted to spend reimbursement funding for removal, replacement, and disposal. The Commission believes that Congress intended to make reimbursement funds available for all such equipment and services participants are required to remove. To reconcile any potential conflicts wherein Reimbursement Program participants are required to permanently remove and dispose of equipment and services from the Covered List as set forth in their plans as obligated by their participation, the Commission interprets the scope of covered communications equipment and services referenced throughout section 4 of the Secure Networks Act as aligning with the scope of equipment and services eligible for reimbursement, that is, such equipment and services on the Covered List that are as defined by the 2019 Supply Chain Order or as determined by the process established in the 2019 Supply Chain Order and in the Designation Orders.
25. The Commission emphasizes that the CAAs amendment and its subsequent modification to the Commissions rules apply only to the Reimbursement Program and do not implicate other sections of the Secure Networks Act. Congress narrowly limited its amendment to section 4 of the Secure Networks Act and as such, the Commission limits its applicability to the corresponding sections of the Commissions rules. The Covered List, published and maintained pursuant to section 2 of the Secure Networks Act, is still in full effect as applicable to the section 3 prohibition on the use of Federal subsidies and the section 5
information reporting requirement, and to the Commissions rules implementing those provisions of the Secure Networks Act. Furthermore, the modification does not impact or revise the prohibition on the use of USF support for equipment or services produced or provided by covered companies, pursuant to section 54.9a of the Commissions rules. The Public Safety and Homeland Security Bureau may still designate companies which pose a national security threat via the process set forth in section 54.9b of the Commissions rules, to which the prohibition in section 54.9a would apply.
26. The Commission next determines that the modification to the scope of equipment and services eligible for reimbursement is effective 60 days after publication in the Federal Register, as applied to prospective applicants to the Reimbursement Program. All providers
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of advanced communications service that participate in the Reimbursement Program must remove, replace, and dispose of all such communications equipment and services from Huawei and ZTE, in accordance with the deadlines set forth in the Reimbursement Program rules. To the extent future designations may identify additional companies from the Covered List that pose a national security threat to the integrity of communications networks and the communications supply chain after the initial application period for the Reimbursement Program, the Commission directs the Wireline Competition Bureau, in consultation with the Office of the Managing Director, to issue further guidance clarifying the procedure for seeking reimbursement for removal, replacement, and disposal costs associated with eligible equipment and services, should the Reimbursement Program be accepting applications and sufficient reimbursement funding be available.
27. Remove-and-Replace Rule. The Commission further revises the removeand-replace rule adopted by the Commission in the 2020 Supply Chain Order to align the scope of equipment and services required for removal and replacement with the scope of equipment and services now eligible for reimbursement through the Reimbursement Program. Therefore, recipients of funding through the Reimbursement Program and ETCs receiving USF support must remove and replace equipment and services from the Covered List that are defined in the 2019 Supply Chain Order or subject to the Designation Orders and the process for designating companies that pose a national security threat to the integrity of communications networks or the communications supply chain, as set forth in the 2019 Supply Chain Order.
Because the Commission currently has only designated Huawei and ZTE as covered companies from the list of five companies found on the Covered List, Reimbursement Program funding recipients and ETCs receiving USF
support must remove and replace Huawei and ZTE communications equipment and services from their networks.
28. In the 2020 Supply Chain Order, the Commission adopted section 54.11, requiring that ETCs receiving USF
support and recipients of Reimbursement Program funding remove and replace all covered communications equipment and services on the Covered List from their networks. The Commission made compliance with the remove-and-

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